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UNITED STATES OF AMERICA BEFORE FEDERAL TRADE COMMISSION WILD OATS MARKETS, INC, a corporation, wipe) ) In the Matter of ) ) WHOLE FOODS MARKET, I ) a corporation, ) Docket No. 9324 ) and d PUBLIC ) ) ) RESPONDENT’S MOTION TO DISQUALIFY THE COMMISSION AS ADMINISTRATIVE LAW JUDGE AND TO APPOINT A PRESIDING OFFICIAL OTHER THAN A COMMISSIONER Respondent Whole Foods Market, Inc. (“WFM”), pursuant to Rule 3.42(e)(2) of the Commission’s Rules of Practice, respectfully moves the Commission to remove itself as administrative law judge (“ALJ”) and to appoint as presiding official a duly qualified ALJ who is not a Commissioner, with all requisite powers and duties as set forth in Rule 3.42(c)." The Commission's prior public statements show that, without having seen or heard a single witness in the Part III proceeding, the Commission has prejudged (i) the legality of the WEFM/Wild Oats merger under Section 7 of the Clayton Act, (i) essential elements of the Section 7 claim, and (iii) the quality and character of WFM’s evidence and likely trial witnesses. In making these statements, the Commission went well beyond zealous advocacy in pursuit of a 1 Rule 3.42(g)(2) states that motions to disqualify should be “supported by affidavits.” The entire factual predicate for this motion rests on statements by the Commission in public court pleadings, however, such that no affidavits are necessary. preliminary injunction against the WFM/Wild Oats merger or to advance its appeal of the denial of its motion for preliminary injunction, It qualified none of them by a “reason to believe” limitation. At a minimum, these statements may lead a disinterested observer to conclude that the Commission has prejudged important issues to be decided in this administrative proceeding. Accordingly, the Commission should recuse itself and appoint an independent ALJ to preside over the trial of this matter. BACKGROUND FACTS On June 5, 2007, pursuant to section 13(b) of the FTC Act, the Commission voted unanimously to file a complaint in U.S. District Court for the District of Columbia, seeking a preliminary injunction to block WEM’s acquisition of Wild Oats Markets, Ine. All four current ‘Commissioners joined in the decision to sue. On June 28, 2007, the same Commissioners voted unanimously to issue the complaint that initiated this administrative proceeding. On August 7, 2007, on its own initiative, the Commission stayed the administrative case, “pending the proceedings” in federal court. Order Staying Administrative Proceedings (Aug. 7, 2007) at 2. The administrative case remained stayed for one year and one day. On August 8, 2008, the Commission sua sponte rescinded the stay. The same day, the Commission set a date for a scheduling conference, and appointed Commissioner Rosch as presiding official over that scheduling conference. ‘The Commission has not appointed an independent ALJ but instead has retained adjudicative responsibility for this matter. ARGUMENT I. The Commission’s Statements to the Court of Appeals Demonstrate that the Commission Has Already Decided Key Merits Issues In the federal court proceedings, the Commission was plaintiff-appellant and all conclusions expressed in the FTC’s pleadings were the Commission’s own conclusions. Lead counsel on the appellate briefs was the General Counsel. Before the Court of Appeals, the ‘Commission pressed arguments that, on their face, state that the Commission has reached judgments on key issues going to the merits of this administrative proceeding. For this reason, the Commission should recuse itself from sitting as ALJ in the administrative hearing. An impartial trier of fact should, in the first instance, address questions of credibility, admissibility, and weight, and render an initial decision on the Section 7 merits based on the record in that proceeding. The Administrative Procedure Act requires that the ALT be “impartial.” 5 U.S.C. § 556(b) (2008). “[A]n administrative hearing ‘must be attended, not only with every element of fairness but with the very appearance of complete faimess.”” Cinderella Career and Finishing Sch., Inc. v. FTC, 425 F.2d 583, 591 (D.C. Cir. 1970) (citing Texaco, Inc. v. FTC, 336 F.2d 754, 760 (D.C. Cir. 1964) quoting Amos Treat & Co. v. SEC, 306 F.2d 260, 267 (D.C. Cir. 1962). The denial of such a hearing violates “the basic requirement of due process.” Amos Treat, 306 F.2d at 267. ‘The “test for disqualification has been succinctly stated as whether ‘a disinterested observer may conclude that (the agency) has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it.” Cinderella Career, 425 F.24 at $91 (quoting Gilligan, Will & Co. v. SEC, 267 F.2d 461, 469, cert. denied, 361 U.S. 896 (1959)),